US Releases Final Batch of Emergency Oil Reserve to Combat Surging Fuel Prices

The US announced on Tuesday that it would release additional oil from the country's emergency stockpile in an effort to contain rising fuel prices driven by energy supply disruptions from the Iran war. The Energy Department stated that it was offering to loan energy companies up to 40 million barrels of crude oil from the Strategic Petroleum Reserve.

This offer represents the final portion of a 172-million-barrel drawdown from the reserve originally ordered in March, with bids due by October 6. Energy Secretary Chris Wright said in a statement that the United States continues to lead coordinated efforts to stabilize oil markets for Americans and the global community.

Once completed, the SPR is projected to fall to its lowest levels since 1982. Recent government data recorded reserve inventories at 284.5 million barrels for the week ending September 19, approaching the generally accepted minimum level of 250 million barrels required for safe operations.

The US initially agreed to withdraw 172 million barrels of crude from its stockpile alongside other members of the International Energy Agency in March to combat rising energy prices caused by the closure of the Strait of Hormuz and strikes on key energy sites across the Gulf. While the 32-member IEA agreed to a coordinated release of 400 million barrels, the US claimed on Tuesday that several European member countries have only released a fraction of their pledged crude oil and petroleum products, prompting a call from Mr Wright for every member country to fulfill its commitments.

Meanwhile, IEA chief Fatih Birol attended an EU energy meeting in Brussels to discuss the potential for member states to release additional reserves onto the market. European Energy Commissioner Dan Jorgensen also confirmed discussing a possible stock release with Mr Birol, noting that further talks are necessary.

Petrol costs have surged since the US and Israel launched coordinated strikes against Iran on February 28, amplifying political pressure on President Donald Trump and the Republicans ahead of November's midterm elections. Petrol prices continue to average more than $4 per gallon compared to $3 last year, while diesel prices recently breached $6 per gallon up from $2.50 a year ago, according to automotive group AAA. In response to the crisis, Mr Trump stated on Sunday that the White House is very seriously considering a diesel export ban, a proposal that has faced pushback from the US energy industry over concerns it could cause further harm to markets and consumers.